The Master Switch: The Rise and Fall of Information Empires - Tim Wu (2010)

Part IV. Reborn Without a Soul

THIS PART IS ABOUT CORPORATE REINCARNATION, how the once mighty then fallen picked themselves up in the last two decades of the twentieth century. The film industries and broadcast networks recombined with the new cable industries and networks in a novel form, giant conglomerates on the model of Time Warner that spanned industries in new ways. Meanwhile, AT&T, broken up in the 1980s, by the first years of the twenty-first century managed to re-create itself, reestablishing the essential lineaments of the Bell system.

In each case the powerful, almost magnetic attractions of size and scale slowly put the pieces back together. Those attractions, as we shall see, are slightly different for the entertainment and communications sides, yet they lead to the same place. For the entertainment industries, size is a means of trying to flatten out the huge risk inherent in creating big, expensive products. In communications, the temptations of size and monopoly arise from an interest in running a fully integrated system and controlling every possible source of revenue.

Yet in the rebuilt industries something is missing, like a part overlooked, and this is the sense of civic responsibility. The old empires were suppressive and controlling in their own ways, yet each had some sense of public duty, informal or regulated, that they bore with their power. At their best, they were enlightened despots. But the new industries’ ethos held that profit and shareholder value were the principal duty of an information company. What reemerged was similar in body but different in its soul.

The information empires created in the 1980s shared many of the worst aspects of both open and closed forms. The new giants had much of the power of the old, without the noblesse oblige. And by the late 1990s it began to seem inevitable that just two industries, the Bell companies and the media conglomerates, would soon control everything in the world of information.

Chapter 16. Turner Does Television

In the summer of 2008 I asked Ralph Lee Smith, folk musician, dulcimer virtuoso, and evangelist of cable television, whether the medium had lived up to his expectations. He paused before allowing it had certainly “helped loosen things up.” He paused again. “Looks to me,” he said at last, “as if the people with the money were way ahead of me.”

Cable as it finally emerged in the late 1970s and early 1980s was an open and disruptive new industry, yet not quite what Ralph Lee Smith had envisioned. True, it hugely altered the nation’s media environment. But it did so less by actualizing the utopian promise described by Smith and others, and more by becoming a medium with unprecedented reach into every marketing niche of American society.

In the 1970s, the cultural visionaries helped by elements of the Nixon administration gave impetus to the release of cable from its regulatory prison. But the firm government management that both the cultural idealists and the bureaucrats hoped for never came to pass.

Those who would shape the future of cable were cut from a rather different cloth than Smith, or Fred Friendly, for that matter. At about the same time that Smith, the Sloan Foundation, and the FCC were drafting the future of cable as they saw it, a businessman named Ted Turner was purchasing WJRJ, a small UHF station in Atlanta, still broadcasting in black-and-white. No sooner had Turner gotten his hands on his first station than he began to develop his grandiose ambitions for the conquest of television, a master plan founded on the idea of the cable network. “Television,” announced Turner with prophetic zeal, “has led us, in the last twenty-five years, down the path of destruction. I intend to turn it around before it is too late.”1

Ted Turner hardly needs introduction. Yet while he is known to the public mainly as the larger than life, bipolar enfant terrible who founded CNN, his greatest claim to immortal fame may actually be his role in opening up television and founding an entirely new industrial model. While it may seem unnecessary to add to the man’s image, Turner is actually undercredited as an industrial innovator. For Turner made a critical imaginative leap respecting what cable could be, one that finally brought the medium invented in 1926 into an era of wide-open entrepreneurism and experimentation. He did so by making practical the use of cable lines not just to carry individual broadcast stations but as a platform for a national TV network. Seeing cable’s potential as far more than an adjunct to broadcast television, he became the essential pioneer of the cable network.

In personality, Turner is undoubtedly a member of that rare breed described by Schumpeter—a man in the mold of Theodore Vail or Adolph Zukor, albeit with a much more public private life and wilder mood swings. “You only have one life,” he once said; “you might as well make it a great one.” Like those others in this cohort, he was seemingly incapable of thinking small, a trait that fed his will to possess very large or famous things. By 2000 he was the biggest individual landowner in the United States, with the biggest herd of buffalo in the world, forty-five thousand head. He married the film and fitness icon Jane Fonda, and he won the America’s Cup, sailing’s greatest prize, twice.

Not surprisingly, Turner has been an irresistible subject for biographers. Four accounts have been published, not including his own, Call Me Ted—each retailing a seemingly inexhaustible stream of manic exertions: daring business strategies, sexual exploits, and a fierce competitiveness in all things. Chroniclers tend to credit, or blame, Turner’s father, an abusive drunk who frequently whipped the young Ted with a coat hanger, even occasionally forcing the boy to do likewise to the father as a bizarre form of punishment.2

Such sordid details may seem irrelevant, but in fact they matter because they influenced how Americans get information. For as we have seen, the mogul makes the medium: the imprint of the personality inevitably informs it, often no less than the technology underlying it. Turner styled himself a heroic swashbuckler, an underdog fighting the brutal domination of the networks. And so network cable, when it finally took off, reflected the scrappy, overzealous character of its pioneer—wildly ambitious, bombastic, fearless, and always on the edge of total failure. Turner explicitly described himself rather as the industry’s Alexander the Great: “I can do more today in communications than any conquerer ever could have done,” he proclaimed, “I want to be the hero of my country.”3

It was by this instinctive will to greatness, the desire for ownership of something big as a path to immortality in the fashion of the ancient epic heroes and emperors, that Turner transformed the cable industry. By dint of completely idiosyncratic programming choices, he turned around Channel 17, the failing little UHF station in Atlanta he had bought in 1970. But that wasn’t enough: he didn’t want to run a station; he wanted to run a major national network, like ABC, CBS, or NBC. For anyone who didn’t already run one, that had been a laughable aspiration for most of the history of radio and television. But Turner was determined to find a way.

Even after the Nixon-era deregulation of the cable industry, the broadcast networks still had many lines of defense. A network, by definition, brought the same content to its affiliate stations around the country—and to do so they needed some means of moving massive amounts of information at high fidelity, a feat beyond the capacity of radio broadcasting except for the few high-powered, specially licensed clear channels. The answer to this necessity lay in access to AT&T’s long distance network, and this would become the secret weapon of the broadcast networks. A show produced in New York would be carried around the country over AT&T’s long lines or microwave towers: from the 1920s through the 1960s there was still no other way of constituting a network. And so, to a degree many have forgotten, the broadcast triopoly and the telephone monopoly were intimately linked.

Through the 1970s, running a network, then, meant paying AT&T’s rates, which, while subject to government oversight, were still high enough to make any start-up a losing proposition. There was the cheap, low-tech alternative of taping shows and mailing the videos. That was how, for instance, Pat Robertson’s Christian Broadcasting Network got its start. But one could scarcely be more than a bit player relying on the post office. For these reasons and others, the only national networks to enter the market from the 1930s through the 1970s were the government-funded Public Broadcasting System (launched in 1970) and ABC, which was fashioned by the FCC out of NBC’s rib.4

Ted Turner did what had seemed impossible when, in 1976, he managed to create the first cable network—that is, the first station available on basic cable all over the country. He did it by substituting as his conduit the new technology of satellites for AT&T’s long distance lines. With a satellite, you could take a single station signal, like that of Turner’s WTCG in Atlanta, beam it up into space, and then beam it back down to a cable operator in, say, New Jersey or Michigan. What Turner created was technically not so much a network as a “superstation”—a station available around the country—yet it was, in effect, the prototype of our cable network.

To give credit where it is due, the use of satellites to carry television was not an idea that originated with Turner. The Home Box Office Network (HBO), under Gerald Levin and others, had done so since 1972 in order to offer so-called pay TV, which, for a premium, brought special content, such as Frazier-Ali boxing matches and feature films, to cable subscribers. But pay TV, however significant an innovation, was less an assault upon than a complement to the networks. Turner, in contrast, by making his WTCG available across the country on basic cable, was going head to head with the Big Three. For the many who depended on cable to get their network programming, his content was available on exactly the same terms. He started small—at first enlisting just four cable operating systems scattered across the country—but he made it big.

Turner’s business model was simple. Overhead was limited, for the most part, to costs of operating his station—paying for access to content (say, old films), and leasing time on a communications satellite. Meanwhile, cable operators (e.g., companies like Cablevision) would pay Turner a fee in exchange for the right to make his channel available to subscribers. Turner would also sell advertising spots on his channel, based on the audience it could be expected to reach. Obviously the rates did not rival those of networks, but in a way, that was the point: more locally targeted advertising for sponsors who didn’t have Coca-Cola’s ad budget. As always, subscribers paid the cable operator for a slate of “basic” cable stations, offering as well the option to pay more for premium content (like HBO), typically without commercials. Then as now, there was some variation in what the cable operator paid to carry a channel (ESPN charging more than the Learning Channel, for example). That in essence is how he did it, and that is how the cable industry operates to this day.5

Sensible as Turner’s business model was, however, in the late 1970s it was easier said than done. Regarding the challenge of drawing advertisers to his network, he recalled, “I knew it was going to be hard to convince the New York advertising community, but I had no idea how hard. My first team of salesmen ended up like the soldiers in the opening scene of Saving Private Ryan. They were mowed down to a man.”6

While Turner described himself as a valiant liberator and cast the networks as oppressive scoundrels, his programming hardly offered a brave new world. Essentially, his was a network of reruns and specialty content like wrestling and cartoons. WTCG carried old sitcoms such as I Love Lucy and Green Acres, cartoons of yesteryear like The Flintstones and Speed Racer (the latter a Japanese import, dubbed into English), Hollywood movies from the 1930s and 1940s, and, of course Atlanta Braves baseball games (Turner bought the team in 1976, in part to gain content for his station). And so if Turner was an innovator in programming, he was an innovator of a rather paradoxical sort, finding an audience for classics of a bygone time, along with slightly “down-market” content like professional wrestling and music videos. Nonetheless he would find glorious terms even for retreads and junk, claiming to be pulling America back to television’s golden age: “I want to get it back to the principles,” he once said, “that made us good.” Nostalgic, Manichaean, and bootstrappy: like programmer, like program.

By 1978, cable operators in fifty states were carrying Turner’s station, giving him the national network he had dreamed of. With Turner’s example having forged the way, the path was now clear for any number of new national cable networks, each dedicated to a specific type of content. Turner once said that if he had been born in another era, he’d have been an explorer, but failing that, he did open the undiscovered country of cable to an explosion of settlement in the late 1970s and early 1980s. For the first time since its invention in 1926, television was suddenly a wide-open medium, with all sorts of notions of what it was meant to be and do proliferating on the cable wire.

In less than a decade nearly a dozen cable networks were launched, including the Entertainment and Sports Programming Network (ESPN), Music Television (MTV), the Bravo channel (at the time of its launch in 1980 a commercial-free station dedicated to drama and the performing arts), Showtime (a competitor to HBO in showing recent feature films), Black Entertainment Television, the Discovery Channel (popular science), and the Weather Channel. Those actually are only the better known, by virtue of having survived; others, such as ARTS, CBS Cable, and the Satellite News Channel would fold or be acquired by other companies.

Turner himself joined the rush he had created, launching his second network, the Cable News Network, in 1980, on which his popular fame rests. The fact of his having launched it shows the marvelous plasticity of Turner’s theories of programming. His original station carried almost no news, and he had once declared “I hate news. News is evil. It makes people feel bad.” Yet with most of the nation still tuning in to the Big Three’s evening news broadcasts, Turner spied an opportunity for profit (as well as mischief, perhaps) too great to ignore.7

Cable didn’t turn out to be quite what its visionary backers had contemplated. Contrary to promoting a common interest and a shared vision of the good, cable television evolved to accommodate a universe of divergent special tastes. It catered to unserved or underserved interests and demographics of all kinds. The networks, from their beginnings, were aimed at the broad middle of American society, while cable pursued racial minorities (BET and Telemundo), perennial students (Discovery and History), news junkies (CNN), and people who didn’t realize they were obsessed with the weather. This capacity to be all things to all people, however, has caused not a few to wonder whether cable has ultimately turned out to be a good or a bad thing.

The notion of the national audience as an amalgam of many diverse interests may seem obvious, particularly in the Internet age, yet the broadcast networks, since the 1920s, had been conceived according to the opposite principle. Committing themselves by design to the idea of a unified national community and culture, they espoused a more benign variant of what the Germans in the 1930s called a volksgemeinschaft. NBC was founded to serve as a nationalnetwork not only in its reach but in its purpose of offering general content suited to everyone. The offerings of more sectarian or special-interest broadcasters, remember, were deemed “propaganda” by the Federal Communications Commission, who encouraged NBC and CBS in their mission of bringing the country together, the noble purpose of broadcasting for decades.

Since the 1980s, cable’s appeal to the niche instead of the nation has thus, together with other factors, been blamed for the splintering, dividing, or clustering of America. There is a difference, of course, between recognizing and creating a social reality, but nevertheless the charge is not unwarranted. Obviously, there is a difference between a nation in which on any given night conservatives are watching Fox News, sports fans are tuned to ESPN, and teenagers are glued to MTV, as compared to the America of television’s yesteryear, where the nuclear family would watch I Love Lucy and the CBS Evening News together, whether they would have preferred to or not. Indeed, the television writer Ron Becker observes, “cable networks and TV shows were designed not only to appeal to those in a targeted demographic group but also to send clear signals to unwanted eyes that certain media products weren’t meant for them.” The alienation was, in a way, the message, and the product.8

Critics like the law professor Cass Sunstein go so far as to describe the fragmenting powers of cable and other technologies, notably the Internet, as a threat to the notion of a free society. “In a democracy,” writes Sunstein, “people do not live in echo chambers or information cocoons. They see and hear a wide range of topics and ideas.”9 There is a bit of a paradox to this complaint that must be sorted out. The concern is not that there are too many outlets of information—surely that serves the purpose of free expression that sustains democratic society. Rather, the concern is that in our society, we have been freed to retreat into bubbles of selective information and parochial concern (Sunstein’s “information cocoons”), in flight from the common concerns we must address as Americans. And so if the networks suffered from being uninteresting in the effort to alienate no one, they did at least tend to feed a sense of a common culture, a common basis of the national self now lacking. There is little to talk about around the proverbial water cooler in a nation segmented by divides of gender, generation, political inclination, and so on.

There is clearly truth to this vision. The big picture encompassing the sweep of the past century, however, makes clear that cable television, and later the Internet, haven’t so much splintered a heretofore united America as returned us to the fragmentation of an earlier era that the rise of big concentrated media had suspended. In fact, the triopoly of NBC, CBS, and ABC itself marked an aberrant time in the history of America, or for that matter, of the world.

The age of “mass media” upended by cable television was actually a period of unprecedented cultural homogeneity. Never before or since the sixty-year interval from the 1930s to the early 1990s had so many members of the same nation watched or listened to the same information at the same time. In 1956, Elvis Presley’s appearance on The Ed Sullivan Show attracted an unbelievable 83 percent of American TV households. A broadcast of the musical Cinderella in 1955 attracted 107 million viewers, nearly 60 percent of the entire U.S. population. Ken Auletta, The New Yorker’s media writer, could say as late as 1991 that “To most of us, television has always meant three institutions—CBS, NBC, and ABC. They have been our common church.” The TV networks, around the world, were probably the most powerful and centralized information system in human history.10

Seen this way, the rise of cable and the Internet thereafter were less a revolution than a counterrevolution, a return to the more scattered pattern of American attention that once was. Before the rise of great media empires of the 1920s and 1930s, the United States, far from a united culture, was, almost by technological default, a house divided according to class, ethnicity, region, and other factors. Perhaps region most of all, for entertainment and culture were necessarily local. Early radio, before NBC, comprised hundreds of local stations, each generating its own content, however humble. Likewise, before the Hollywood studio gained ascendancy, local theaters decided for themselves what films to show. And of course before the telegraph, newspapers were necessarily local. In this sense, cable television’s undoing of the mass, or national, media culture was merely the undoing of a transient twentieth-century invention. In the nineteenth century, as now, there was little common information for any two randomly selected American citizens to discuss, even if there had been a water cooler.

For the purposes of our narrative, the conclusion is clear: an open medium has much to recommend it, but not the power to unify the country. For a fully united national community, nothing succeeds like centralized mass media, a fact not lost on the Fascist and Communist totalitarians. With an open medium, one has diversity or fragmentation of content, and with it, differences among groups and individuals are accentuated rather than elided or repressed. None of this divisive power was plain to cable’s early visionaries, who saw only good in a proliferation of diverse subjects and points of view rather than the diffusion of American identity that commentators like Sunstein lament.

Yet in one important sense cable was never truly diverse. From its birth, the medium was always as relentlessly commercial as the broadcast variant, and with a few exceptions (such as C-SPAN) it has never furnished many harbors for programming that doesn’t need to make money, perhaps even fewer than broadcast television, which at least in the early days included so-called sustaining (or unsponsored) programming and before the ascent of cable had added the government-funded network, PBS.

Unfortunately, as it developed in the late 1970s, cable became wedded to the idea of niche marketing—of milking every audience segment with targeted advertising. It didn’t have to be that way: cable television was never free as broadcast was, and could, in theory, have developed a model to support itself on fees alone (just as HBO did, and continues to do). Instead, it mostly developed in the cast of its founding mogul, driven by the incessant need to raise revenues and attract attention. And thus after Turner, cable gained both its enduring viability and its tendency toward pandering and crassness that have become its hallmark, giving the very word a whiff of the down market.

To understand how much difference the circumstances of creation can make, consider the contrasting example of the Internet. Cable was born commercial, while the Internet was born with no revenue model, or any need of one. Its funding came in research grants, making it, for a long time, the information media equivalent of a public park. And while today it can be used to make money, the network, being quite purely open, can still easily carry content that makes no financial sense, from personal blogs to sites like Wikipedia. Oddly enough, that’s how many of the most lucrative Internet firms got their start.

Cable, on the other hand, with limited exceptions, has for its entire history been driven by a constant appetite for cash and for content that could deliver a sufficient audience to yield a return on capital. The scale needn’t be vast; so long as there is someone with consumer needs and a credit card prepared to watch Blue Crush at 3 a.m., the model can work. But even with 1000+ channels, you could never just put on programming heedless of whether there was an audience. Cable operators carry channels because they believe their subscribers want them, and subscribers pay for the system. Even among a thousand choices, a channel with no viewers is a deadweight an operator can ill afford. That difference, along with certain structural ones, is still what distinguishes cable from the Internet today.

For all its shortcomings, there is no denying that cable shook up the way Americans get information and forever changed the face of television radically. As an object lesson in the way information networks can develop, it gives us occasion to consider what we truly want from our news and entertainment, as opposed to what sort of content we might be prepared to sustain, however passively, with our fleeting attention. For cable offered choices really only in the commercial range—enough, however, to suggest what a truly open medium could deliver to the nation, for better and for worse.